NECESSITY,
FUNCTION, AND CONFORMITY: To interpret the sales and use tax law as it applies
to sales of tangible personal property through vending machines.

Section 1.
Persons who own vending machines which dispense tangible personal property, or
operators of such machines under lease or rental agreements, must obtain a
permit to engage in the business of selling tangible personal property and must
report and pay to the department the tax upon the gross receipts from sales
made through such machines. One (1) permit is sufficient for all machines of
one (1) owner or operator.

Section 2. The
owners or operators of vending machines shall be responsible for reporting and
paying the tax on the total gross receipts even though the owner or operator of
the place in which the machines are located receives a share of such gross
receipts under a commission or concession contract. In reporting and paying
such tax, the owner or operator shall be deemed the agent of the operator or
owner of such place of business in which the machine is located to the extent
of commissions due the latter. Gross receipts from sales of tangible personal
property made in portions of twenty-five (25) cents or less through coin
operated bulk vending machines where unsorted merchandise is dispensed in
approximately equal portions are exempt from the sales and use tax (KRS
139.470(6)).

Section 3. A
statement in the following form must be affixed upon each vending machine in a
conspicuous place: "This vending machine is owned (operated) by _______
Owner (Operator), __________ Place of Business of Owner (Operator), who holds
Permit No._____, issued pursuant to the Sales and Use Tax Law."

Section 4. If
the owner or operator of vending machines also places upon each machine a
statement that the sales tax is included in the price of the property
dispensed, he may compute his liability for the tax in the same manner as all
other retailers who separately state the tax.

Section 5.
Adequate and complete records must be kept by the owner or operator showing the
location of each vending machine owned or operated by him, the serial number
thereof, purchases and inventories of merchandise bought for sale through such
machine, and the gross receipts derived from each location during each tax
period. (SU-55; 1 Ky.R. 466; eff. 3-12-75; Am. 13 Ky.R. 1084; eff. 1-13-87.)